Territory to seek GST exemption on heating fuel

After some wrangling in the legislature Wednesday, MLAs voted in favour of lobbying Ottawa to remove the GST on home heating fuel, power generation and transportation of essential goods North of 60.

Steve Nordick, the Yukon Party MLA for Klondike, introduced the motion following question period.

“Life North of 60 degrees is different from life in southern Canada,” he told the house.

“We have longer, colder and darker winters (and) this causes an unfair and increased burden to all Yukoners and the citizens of our sister territories,” he said.

If a family’s annual heating fuel bill was $2,400, said Nordick, the move would save it more than $120.

The Klondike MLA went on to say that such a GST exemption would save residents of Dawson City, who collectively consume upwards of three million litres of heating fuel annually, more than $200,000.

The motion urged the Yukon government to work with its territorial partners, Nunavut and the Northwest Territories, to seek the GST relief.

While Mayo-Tatchun MLA Eric Fairclough said Liberal members would support the motion, he chided the ruling Yukon Party for its “hands in your pocket approach.”

Fairclough argued that if the government really wanted to ease the cost of living for Yukoners, it could reinstate the Rate Stabilization Fund (RSF), designed to give Yukoners a break on their electrical rates.

Last spring, the government began phasing out the annual fund that had spiralled from $2 million when it was introduced in 1998, to more than $4 million in 2005.

Prior to the RSF, the Faro lead-zinc mine had been the territory’s largest consumer of electricity. When it was permanently closed in 1998, Yukon Energy lost a customer that provided 40 per cent of its revenue.

When the complete RSF expires this summer, power bills are expected to climb another 15 per cent on top of the 15 per cent they rose from last year.

“It’s interesting that the member is bringing this forward ... asking the federal government for some help because people are paying more out of their pocket for home heating fuel and electricity,” said Fairclough

“But part of the problem is with the Yukon Party government too. They increased our power bills by 15 percent and, come the summer, there will be another increase.”

In response, Economic Development Minister Jim Kenyon defended the RSF sunset on the basis of promoting conservation, a point the Yukon Conservation Society supported.

“It appears the Liberal party ... wants to continue to subsidize energy (and) do away with any impetus that would encourage people to conserve energy,” said Kenyon.

“They don’t appear to really have any conservation ethic at all: put all the money into that, so people don’t have to worry about it; leave the lights on; drive the extra 20 miles.

“They don’t seem to understand that the world is rapidly changing and - at the bare minimum - a modicum of conservation ethic is something to encourage.”

Before the house passed the motion, originally presented as seeking GST relief on heating fuel and power generation, NDP Leader Todd Hardy, the Whitehorse Centre MLA, drew support for an ammendment to include transportation of essential goods.

The federal Conservatives have reduced the GST from seven per cent to five per cent since taking office in early 2006.